Wal-Mart Case Study

A Wal-Mart Case Study

10th October, 2013

Words depend: 1643


The American based company " Wal-Mart” is the world's biggest dealer in terms of product sales. Supply sequence management is among the core focuses of the American giant. A large number of analysts assume that the most primary reason for Wal-Mart success is the fact it is regarded a " best-in-class” business for its supply chain supervision practices (Alyea, Jimmy, 2012). Sam Walton, the creator of this good company, presented lots of ideas on building a better retailing company: selecting talented and experienced staff, offering significant discount on product prices, and locating the stores in more convenient areas. The strategy was to sell high quantities of discounted products and to be able to achieve this target Wal-Mart needed to achieve large levels of productivity in its supply chain. With this paper, we all will discuss two areas: distribution and logistics system, and the rewards the IT brought to Wal-Mart's inventory and logistics administration.

PART 1 Distribution and logistics program

1 . Circulation Centres

A distribution hub is a factory which is filled with products to be redistributed to retailers and wholesalers, or right to customers. Once Wal-Mart makes a decision to enter a new area, it truly is first decided whether the chosen location may endure enough stores to back up a syndication centre. After building a division centre, shops will be opened around that steadily to be able to satiate the spot. Within the center, different sections are provided on the basis of the quantity of items received. To be able to ensure a reliable and regular physical division, Wal-Mart uses sophisticated barcode technology and hand-held computers, which will be mentioned in the second question. Wal-Mart has also implemented an integrated strategies system by simply establishing a great alliance using its main suppliers in order to exchange information with regards to its revenue and inventory. This helps suppliers to manage Wal-Mart's inventory also to formulate their own production and distribution plans. The same program allows sellers and suppliers to send Wal-Mart an ASN " advanced shipping notice” of every delivery to a division centre. Wal-Mart uses the ASNs in order to schedule the dispatch of products from circulation centres to stores. The wide range of info being changed in the system helps Wal-Mart to reduce storage and products on hand carrying costs as well as lowering stock-outs at its stores (Zinn & Parasuraman, 1997).

2 . Trucks and Truck Individuals

While Wal-Mart owns a well-performed division centre and has a substantial reputation on it, it also likes the good popularity on its logistics infrastructure. Being known as the fast and responsive travel system, Wal-Mart maintains a exclusive fleet of vehicles and a skilled staff of truck motorists. Wal-Mart's substantial truck fleet enables the company to adopt JIT " just in time” activities. Circulation centres can make regular and tiny deliveries to each store while trucks can be obtained and ready to serve. As a result inventory at the shop level can be reduced for the minimum because stores depend on continuous renewal provided by distribution centres with short business lead time. Inventory levels like a percentage of sales include noticeably decreased over years to reach regarding 10% by simply 2005 (Cherie, et approach., 2008). The organization hires just experienced individuals who have driven more than three hundred, 000 accident-free miles and whom it believes will be committed to customer care. With the aim of applying a strict control among motorists and their behaviours, Wal-Mart presented the ‘Private Fleet Rider Handbook' to educate the motorists with regard to the code of conduct.

3. Cross-docking

To be able to develop their logistics system and make it works far better, Wal-Mart utilized a new technique named " cross-docking”. Mix docking is actually a...

References: 1 . Alyea, Jimmy. (2012) ‘Analysing Wal-Mart 's Distribution and Logistics System'. Jimmy Alyea, MBA, 11 February. Available at: (accessed 1st April. 2013)


5. Goddard, Jules. " The architecture of main competence. " Business Strategy Review 8. 1 (1997): 43-52. Offered at: (accessed 7th April. 2013)


11. T. Ganesan ain al. (2009) ‘Supply string management and retailer performance', Journal of Retailing eighty five (1, 2009) 84–94. Available at: (accessed 8th March. 2013)



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